There has been a great deal of media surrounding Obama’s proposed stimulus package. As always, there have been the usual political discussions on television and in newspapers regarding how and where the money should be spent. When it comes to government, there is always an abundance of opinions and interests, some being more powerful than others. However one idea caught my attention, partly because it came from a friend, and not a lobbyist or politician, but mostly because the logic seems to be widely adopted in today’s conservative Republican culture—dedicate more public resources to our already behemoth military. The sad thing is that many mature, adult citizens I know cannot see outside the Bush's administrations love affair with the defense industry.
I grew up in a conservative-Republican household during the late nineties and early 2000s, so I can smell red-state ideologies from a mile away. Therefore, I was not shocked to hear how my friend’s stimulus proposal centered on the defense industry and projects such as building a new aircraft carrier.
A job created in the defense industry will provide different long-run benefits for Americans compared to a job in health care, education, or clean technology. Increasing defense spending would provide the public with a return on investment close to zero, since bombs just blow up and aircraft carriers require sailors and costly maintenance.
President Eisenhower delivered a speech 60 years ago where he listed the opportunity costs of increased defense spending. My Republican friends miss the theme behind Eisenhower’s speech, which is “do we really need another carrier?” In the grand scheme of things, America does NOT need another aircraft carrier—we have an over-supply of warships and military bases. If our government abandoned building battleships and weapons for the next 5 years we would still command the world’s most powerful military. Although the defense industry provides jobs in the short run, its products do not give America a long-term competitive advantage. Building more schools does.
Thankfully Obama’s proposed stimulus invests in projects that give America a competitive advantage in today’s global economy. One part of the bill dedicates $11 billion to upgrading America’s old, inefficient electric grid. The new Smart grid technology vastly improves the efficiency of electricity transmission and is a necessary investment if we want to implement renewable sources of electricity on a grand scale (smart grids are also an excellent export opportunity for the US economy since many countries need new grids). Since our current electricity grid cannot handle the demands of energy technologies like wind and solar, we have to upgrade our electric grid anyway. More efficient and cleaner electricity makes America more competitive compared to countries with older electric grid, so why not upgrade now? Smart grids, and not another another aircraft carrier, have proven benefits to both consumers and businesses.
And what’s not to like about investing in a future industry? The Clean Tech industry has been the top pick for private investment capital, even in the most recent quarter amidst $40 oil and weak capital markets. Another $43 billion of the proposed stimulus will invest in Clean Tech by upgrading existing public buildings and schools to be more energy efficient, providing loan guarantees and grants to advanced battery technology, and loan guarantees for renewable energy and transmission projects. Compared to building another aircraft carrier, the Clean Tech sector has the potential to lead a future wave of “Made-in-America” economic productivity, prosperity, and (most importantly) environmental sustainability.
The Obama proposal is priced at $825 billion and don’t forget that the US government is already deep in debt. Due to the past 8 years of fiscal irresponsibility and poor public investment, it is more important than ever to make sure we receive the most bang for our taxpayer buck. This is no time to ask for more warships when our roads, grids, and schools are crumbling.
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